The OAG found CGMI Overcharges Violated the Martin Act and Executive Law§ 63(12)

New York Attorney General Reaches Agreement with Citigroup Global Markets Over Investment Account Overcharges

New York's Attorney General, Eric T. Schneiderman has reached an agreement with Citigroup Global Markets, Inc. (CGMI) in regard to overcharge fees for investment account holders. CGMI has agreed to reimburse customers a total of approximately $20 million dollars.

Under the terms of the agreement, 15,000 CGMI customers will receive reimbursements of approximately $4.5 million dollars.

A 2012 investigation of CGMI led to the discovery that CGMI had overcharged 31,401 TRAK accounts above pre-negotiated fees between CGMI and its clients.

The 2012 investigation between the OAG and CGMI led to the reimbursement of $13,466,277.86 in principal and $3,312,021.41 in interest to CGMI clients who had been assessed fee overcharges.

Under the terms of the agreement, the OAG found that the overcharge of fees by CGMI “violated the Martin Act and Executive Law § 63(12)”. In addition to the approximately $20 million dollars in customer reimbursements and interest payments, CGMI agreed to submit quarterly written reports to the OAG for a period of three-years, and agreed to reimburse the State of New York $1 million dollars as monetary penalty.

The Martin Act, codified in New York General Business Law article 23-A, sections 352–353, provides New York’s AG the investigatory and subpoena power, and empowers the AG to “bring an action in the name and on behalf of the people of the State of New York” against the entity, if fraudulent practices are determined to have occurred.

Assurance of Discontinuance, No. 16-178, Investigation by ERIC T. SCHNEIDERMAN, Attorney General of the State of New York, of CITIGROUP GLOBAL MARKETS, INC., January 5, 2017 https://ag.ny.gov/sites/default/files/2017.01.12_cgmi_fully_executed_aod.pdf